A Monopolist Sells in Two Markets

question 27

Multiple Choice

A monopolist sells in two markets.The demand curve for her product is given by p₁ = 122 - 2x₁ in the first market and p₂ = 306 - 5x₂ in the second market, where x_i is the quantity sold in market i and p_i is the price charged in market i.She has a constant marginal cost of production, c = 6, and no fixed costs.She can charge different prices in the two markets.What is the profit-maximizing combination of quantities for this monopolist?

• A)x₁ = 58 and x₂ = 32.
• B)x₁ = 29 and x₂ = 30.
• C)x₁ = 59 and x₂ = 29.
• D)x₁ = 39 and x₂ = 28.
• E)x₁ = 49 and x₂ = 40.

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Definitions:

Mean Square

The average of the squares of the deviations or differences from the mean, often used in variance and regression analysis.

Within-Group Variance

The measure of how much the data points in a single group vary or deviate from the mean of that group.

Mean Square

Mean square is a statistical measure used in variance and regression analysis, representing an estimate of the variance of a dataset or the value of one variable's dependency on another.

A*B Interaction Effect

The effect on a dependent variable that results from the combination of two independent variables, distinct from the effect of each variable individually.